Australia needs to attract more migrants to boost the economy to sustain future growth, the Migration Council of Australia says
March 7, 2015 Independent modeling commissioned by the Migration Council of Australia warns about the dangers of reducing net migration. The modeling says Australia needs 250,000 migrants a year to boost the economy by $1.6 trillion by 2050. The migration report comes as the government releases the five-yearly Intergenerational Report (IGR) which shows that migrants are expected to make up a smaller percentage of the population in coming decades.
The IGR provides a snapshot of Australia in 2055, when the population is tipped to almost double from 24 million today, to 40 million. The modeling shows Gross Domestic Product will fall and wage growth will slow.
The government assumes net overseas migration will remain stable at 215,000 people per year, down from a peak of 300,000 in 2008-9.
Currently, net overseas migration (new migrants arriving, minus Australians leaving per year) makes up 1 per cent of the national population, but that is expected to decrease to 0.5 per cent by 2055 under the IGR modeling.
But Treasurer Joe Hockey said multiculturalism would not diminish.
“It won't change the face of Australia because we are a diverse population," he told SBS.
The Intergenerational Report proposes skilled migration that is well targeted and appropriately adjusted to economic circumstances.
But the alternate modeling from the Migration Council of Australia shows if annual migration was increased to 250,000 people, the economy would be boosted by $1.6 billion – a rise of $1,125 per person in Gross National Income.
The treasurer said there were pros and cons to be considered.
“If you did that then you'd need to build more infrastructures to cope and that means government spending more money so that's a good debate to have and we welcome the debate," he said.
The five-yearly IGR assesses how changes to Australia's population size and age profile may impact economic growth, workforce and public finances over the next 40 years.
It finds economic growth will slow as Australians live and work longer.
Gross Domestic Product is tipped to fall to 2.8 per cent over the next 40 years, compared with 3.1per cent over the previous 40 years.
By 2055 almost one in five people aged 65 will still be in the workforce, and around 40,000 people will make their 100th birthday.
Wages growth is also expected to slow to 1.4 per cent, down from 1.9 per cent over previous years. By 2055 the average Australian can expect to earn $117,300.
However, Australians are expected to be working much longer. By 2055 almost one in five people aged 65 will still be in the workforce, and around 40,000 people will make their 100th birthday.
The report also makes a case for further cuts to government spending, particularly in health and social services.
It warns if proposed budget measures do not pass the parliament, net government debt would reach 60 per cent of GDP.
In contrast, if proposed policy was implemented, the net debt would be wiped by 2031-32.
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